The Amazon effect on small businesses
Megacompanies and the billionaire bros who run them wield an insane amount of power. We know this. So a book about how one of the biggest of them all — Amazon, which aims to sell us literally anything we could ever want with a single keystroke — is figuratively and literally changing the American landscape could be a bit of a snore.
But in Fulfillment: Winning and Losing in One-click America, investigative journalist Alec Macgillis has done a stellar job of explaining the social, economic, political and health impacts when a handful of billionaires hold 3 per cent of the world’s wealth — and what those changes mean on a micro level. Macgillis exposes the human wreckage left when the wave of “progress” has swept past. The small towns bypassed, the businesses shuttered, the jobs wiped out, the families broken.
He charts Amazon’s growth from a Seattle start-up selling books online to the multi-tentacled behemoth of today — a company that incorporates data storage, streaming, e-commerce, artificial intelligence and gourmet supermarkets. In Macgillis’ telling, Amazon’s fulfillment centres (vast warehouses packed with goods) are Orwellian workplaces where employees are afraid to take a toilet break and workplace accidents are commonplace. The data centres (IT storehouses, the physical embodiment of “the Cloud”) that have popped up across the US, Europe, Asia, Australia — and soon — New Zealand are sold to communities on the basis of job-creation but need few staff.
The cities that become Amazon hubs experience an immediate boom that enriches many but forces poor people out due to cost-of-living spikes.
In a book packed with astonishing vignettes there is an especially nauseating passage about the inducements mid-sized American cities presented to be considered for Amazon’s second headquarters, after Seattle, in 2017. “Tucson hauled a twenty-one foot saguaro cactus to Seattle by truck. The mayor of Kansas City gave five-star reviews to a thousand Amazon products. Dallas, appealing to Amazon’s dog fetish, offered to waive local pet adoption fees for company employees. Atlanta proposed adding an Amazon-only train to the city’s subway system. Close by, the Atlanta suburb of Stonecrest offered to rename itself Amazon.”
Macgillis is at his best when describing how Amazon came to dominate the stationery market in El Paso, Texas, highlighting the experience of a Texas family who ran a small stationery supply store. With declining sales and having let staff go, the family was understandably tempted when they were invited to join the Amazon Marketplace in exchange for 15 per cent of sales. They would have access to literally millions of customers — but they would struggle to make a profit.
“The company kept emailing and calling,” writes Macgillis. “The gist: you’ve got to do this. When [family head Teresa] Gandara asked them about the 15 per cent cut, they told her, ‘Well, yes, that’s what people pay.’ That’s our margin, she told them. ‘If you don’t want to do this, no one’s pushing you,’ they said. ‘No one’s forcing your hand.’”